Approach to Financial Freedom

 

Borrow Smart Retire Rich Explained.pdf

        Borrow Smart Website

Lack of solid financial education and knowledge is pretty common these days in our society, and living busy lives by the end of the day most of us simply do not have the time or the energy to acquire financial knowledge. The concepts in the book will expose the reader to practical and innovative strategies that any homeowner can utilize to expand his or her ability to build wealth. There are many key ideas presented that most people go through life without ever knowing. Ideas such as the difference between investing in assets versus liabilities, the importance of safety, liquidity and rate of return and how to protect your equity (investment) from depreciation, how banks think about money versus how homeowners think about money, the significant role of liquidity in your everyday life, the concept of EPR(tm) and the role it should play in your borrowing decisions, and, finally, the difference between market risk and discipline risk.

For really long time traditional financial planning model focused only on the management of assets side of balance sheet consisting of well-known classes of financial asset like stocks, bonds and mutual funds, etc. Typically real estate as an asset class was ignored until it was sold. What makes real estate interesting is the fact that it can be viewed as a double-edged sword: it is an asset yet it has liabilities attached to it in the form of mortgage. For most homeowners the biggest financial asset on their family balance sheet is definitely their home. But it is also their family's largest liability too.

It is likely that more wealth will flow through one's house than all of their other assets combined and that understanding on how to manage that wealth and its associated cash flow may well determine whether or not one will achieve financial independence.

I have been teaching many of the concepts in my book to my clients for years and I finally put them all in an easy to read and simple format for everyone to enjoy and profit from. and should be mandatory reading for both homeowners and potential homeowners alike.

I recommend this book to all of my clients. The 7-Step Borrow Smart Solution is a wonderful process that provides all of the necessary tools for deciding which way is the best way to finance your house. Most people don't even know that there are things to consider besides interest rates and loan fees. I want my clients to understand that a owning a house could affect many areas of their financial life and that there is a new and better way to evaluate their money decisions. This book gets an A++ and is long overdue.

Reading this book will help you to break down the barriers that have led you to financial misconceptions in your previous live, and will give you new knowledge and, more importantly, the confidence to apply this knowledge in a new, more practical way, and to get the results you always wanted to get but thought that they were impossible to obtain. You will be able to see that mortgage can be used as a powerful financial leverage instrument that can be employed to accomplish seemingly unobtainable before goals such as lack of funds for comfortable retirement, college education for kids.

Any balance sheet, being that of large company or an individual, has two sides: assets and liabilities. For really long time traditional financial planning model focused only on the management of assets side of balance sheet consisting of well-known classes of financial asset like stocks, bonds and mutual funds, etc. The real estate as an asset class was ignored. What makes real estate interesting as an asset is the fact that it can be viewed as a double-edged sword: it is an asset while it has liabilities attached to it in the form of mortgage. For most homeowners the biggest financial asset on their family balance sheet is definitely their home. Therefore, the mortgage attached to the house becomes the family's largest liability. In fact the mortgage payment combined with property taxes, insurance and other home related expenses can easily consume as much as 60% of one's after-tax income. The irony is that managing those largest amounts on one's balance sheet and largely affecting one's budget for the most part were simply ignored by traditional financial planning model and financial planners. This book fills all the gaps in that outdated system of financial planning!

Everyone always pay attention to the management of their assets, few people realize the management of their liabilities can create as much or more wealth. Being a mortgage lender who for 25 years encouraged everyone to pay their mortgage off as soon as possible I have in the last few years learned that is not always sound advice. The financial planning revolution in the mortgage industry has accelerated in the last 5-6 years as a result of planners such as Douglas Andrews ("Missed Fortune 101") and Ric Edelman ("Ordinary People, Extraordinary Wealth" among his many) showing the industry and the public that in most cases paying your mortgage early is a bad strategy. We all think that we want to be "mortgage free" and for the most part this is because our parents and grandparents have always advocated this. This thinking goes back to the depression where banks could foreclose on a house even if the payments were current. The banks did this because they had to have liquidity to fund the run on cash from stock investors facing margin calls.

The basic premise is to use only a small part of your downpayment on the mortgage and invest the rest. The government allows you a tax savings that subsidizes your mortgage payment and you have the rest of your funds to invest in a side account. This account will grow and through compounding will increase to a point that in most cases far before the mortgage term is up you have sufficient assets to pay the loan off in a lump sum. However it is wise to keep that liquidity and let it grow. Besides the investment growth you are keeping your funds liquid in case of a financial emergency. If you lose your job or your house is destroyed by nature (Katrina) you have funds to live on because the bank won't loan you money against the property in either case. By being liquid you can weather whatever situation arises.

While financially carrying a large mortgage is the smart thing to do I have many clients that say peace of mind is worth more than the wealth growth or liquidity. Regardless of the financial advantages, to many people peace of mind is more valuable than additional money. No matter how you feel you owe it to yourself to investigate the options and make up your own mind. I have seen a lot of people totally change their mindset from this book and the others I mentioned.  Definitely a must read for anyone seeking to become financially sophisticated in his understanding of how real estate, particularly his home, functions in terms of overall wealth creation.

In this country, we are taught to consume rather than conserve. With the looming threats of the government eventually eliminating social security and corporations no longer offering pensions, we need to protect our future and you can do this more confidently by following the 7 Steps to Borrow Smart and Retire Rich!

The "7-Step Borrow Smart Solution" is an exciting process that provides all of the necessary tools for deciding how best to finance your home. Most people don't realize that there are things to consider other than interest rates and loan fees.

Reading this book will help you to tear down the wall of financial misconceptions acquired in your life, and will give you new knowledge and the confidence to apply what you have learned in a more practical way in order to obtain the results you once thought impossible.

I want my clients and my fellow advisors to understand how owning your home can affect many areas of one's net worth and that there is a new and better way to evaluate one's financing decisions. I've learned ways to increase my family bank safely and conserve it by following the tools provided in this book.

Borrow Smart Retire Rich Explained.pdf                      Borrow Smart Website

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